State of emergency: Relief supplies arriving in Nepal’s Gorkha district following the earthquake of April 2015
Photograph: Philippe Lopez/AFP/Getty Images

The challenges faced by organisations charged with responding to humanitarian crises have never been greater. While a growing number of people around the world are affected by conflict, disease and natural disasters, the funding to provide emergency aid to them has never been so stretched. The financial deficit for humanitarian action is now believed to be $15bn.

The first World Humanitarian Summit, held in Istanbul in May this year, was a key opportunity to tackle these issues. The event brought together thousands of leaders from the UN, NGOs and agencies involved in delivering humanitarian support.

One of the key outcomes from the summit was the Grand Bargain, a new humanitarian financing agreement signed by 30 representatives from a range of aid agencies, such as the International Committee of the Red Cross, and donors, including the UK’s Department for International Development. The “bargain” is that donors will be more flexible on where their funding goes, and aid agencies, in turn, will be more transparent and efficient in how they spend it.

The deal was the subject of a recent Guardian roundtable event supported by international development company Crown Agents. The event brought together 13 leading humanitarian figures to debate the potential impact of the Grand Bargain. “It is an opportunity for lots of us involved in delivery [of emergency aid] to come together to talk about what practical steps we can make,” said Marie Staunton, chair of the Crown Agents board, in her opening remarks.

Of the 10 key targets in the deal – which include cutting down on bureaucracy and reducing management costs – Staunton highlighted the focus on increasing the proportion of funds that reach local NGOs during humanitarian crises. In what has been seen as one of the key achievements of the deal, the Grand Bargain pledges to increase the funding local organisations receive from 2% of the overall humanitarian budget to 25% by 2020.

A not so grand bargain?

Many speakers, were sceptical, however. “It is an outrageous trick, because it gives the illusion of somehow resulting in a grand transformation,” said Mukesh Kapila, professor of global health and humanitarian affairs at the University of Manchester. “But, actually, it is about being rewarded for doing what you should be doing anyway. We have been talking about transparency, accountability and helping local people for as long as modern humanitarianism has been about.”

The agreement was flawed from the outset, argued Owen Barder, vice-president and Europe director of the Centre for Global Development. “We want a humanitarian system whose primary response and accountability is to affected populations, but they are the people whose voice was least present in this bargain,” he said. “The idea we should be doing a bargain with old, wasteful, ineffective incumbents, who are heavily invested in the current way of doing business is insane – it is a bargain with the wrong people.”

While it is difficult to get excited about the Grand Bargain, said Sorcha O’Callahan, head of humanitarian policy at the British Red Cross, it is still important to hold donors to account on the agreement. “The hard commitments are around transparency,” she said. “And I think it can deliver quite a lot in terms of holding the formal system to account and showing inefficiencies.” The agreement pledged to ensure donors and aid agencies produce more transparent, high-quality data on funding within the next two years.

A key area of contention was needs assessments – the process by which aid organisations determine what help is needed in a given emergency. While the Grand Bargain called for less duplication and more coherence, critics argue it fell short of ensuring that these assessments were carried out independently.

“The biggest and most complicated thing it was meant to come out with is the independent needs assessment,” said Sara Pantuliano, managing director of the Overseas Development Institute. “If you want to dismantle the way in which the system works and you really want to respond to a crisis depending on the needs of a particular situation, that is the first thing you need to do.”

“NGOs don’t always have the right incentives to work together on joint needs assessments,” said Gloria Donate, head of disaster response at Plan UK. She said that more could be done by donors to encourage NGOs to work together effectively and be more inclusive of local groups working in areas affected by humanitarian crisis.

Hard cash targets

The agreement’s tepid approach to giving cash to those affected by humanitarian crisis, rather than vouchers or in-kind assistance such as medicine, was also a source of criticism. “There is a massive evidence base to demonstrate how much more empowering and effective cash is,” said Pantuliano. Although the Grand Bargain recognises the need to increase cash-based programmes, there was disappointment that this isn’t accompanied by firm targets. Currently, only 6% of humanitarian programmes are cash-based.

While it was recognised that the big donors, which include various national governments, were pivotal in bringing about reform to humanitarian response, Lily Caprani, deputy executive director of Unicef UK, noted the complex challenges they face. “Donors are in an incredibly difficult place,” she said, commenting on a politicisation of the aid agenda, in particular how counter-terrorism laws may complicate the Grand Bargain’s aim of increasing funds to local humanitarian actors. The relationship between donors and their electorate is crucial, she added: “We can strike bargains between ourselves and donor governments at high-level summits, but without the political mandate that the next government will get from the British public, it is not as meaningful.”

While the deal calls for a participation revolution in humanitarian response, there was wide agreement that more could be done to shift power back to local organisations in areas affected by crises. “We can use the Grand Bargain as a peg to build a new system for monitoring and accountability that puts citizens at the front,” said Danny Sriskandarajah, secretary general at Civicus. One way of enabling this, he argued, was to make it easier for them to access humanitarian funds. “Right now, it is too easy for donors to give the excuse that ‘we can’t write that cheque to that southern or smaller NGO because they just don’t meet our requirements.’”

The role of diaspora groups, young people and technology were all highlighted as central to making progress in humanitarian response. Elvina Quaison, project coordinator at the African Foundation for Development, said more recognition needs to be given to the role diaspora groups play in providing funds to crisis areas: “It [diaspora funding] comes much quicker [than formal humanitarian aid] and doesn’t just benefit the recipient but also those around them.”

Gemma Graham, chief operating officer at Restless Development, emphasised the importance of the 600 million-plus young people living in conflict-affected regions to the frontline of humanitarian response: “To not recognise that they have agency and capacity is to miss an opportunity.”

The role of technology in increasing participation and efficiency in humanitarian response was noted by Sherif Elsayed-Ali, deputy director of global issues and head of technology and human rights at Amnesty International. “People today are voting more with their money, and technology can help underpin that,” he said, citing examples of direct-access enterprises, such as Uber. “But donors have to be much more willing to give money directly without having much control of where it is going.”

Speakers reflected on how their own organisations were planning to respond to the Grand Bargain. “We have made commitments on increasing efficiency and reducing bureaucracy – less paper more aid,” said Howard Mollett, senior policy adviser at Care International. One of the key ways of achieving the participation revolution, he added, will be in international aid agencies and donors returning to focus more closely on what is happening at the country level.

Barder gave some specific examples of how humanitarian financing could be improved, including the idea of “refugee bonds”: “We spend thousands of dollars on every refugee – an average of between 15 and 20 years’ [funding],” he said. “Why not turn that into a single lump-sum payment?” he asked, suggesting it could be more beneficial in helping refugees set up a new life.

The discussion finished on a note of optimism, with Staunton arguing that if the sector focused on what was achievable, there was good reason to be positive. “In terms of looking at efficiency, it is about [creating] single needs assessments, and we think that is quite possible,” she said. In terms of increasing funds towards local organisations, making sure they are able to be audited and access funds themselves is crucial, she said: “That is completely possible too.”

At the table

Oliver Balch (Chair) Journalist

Owen Barder Vice-president and Europe director, Centre for Global Development

Gloria Donate Head of disaster response, Plan UK

Gemma Graham Chief operating officer, Restless Development

Howard Mollett Senior policy adviser, Care International

Sorcha O’Callahan Head of humanitarian policy, British Red Cross

Danny Sriskandarajah Secretary general, Civicus

Marie Staunton Chair of the board, Crown Agents

Lily Caprani Deputy executive director, Unicef UK

Sherif Elsayed-Ali Deputy director of global issues, head of technology and human rights, Amnesty International

Mukesh Kapila CBE Professor of global health and humanitarian affairs, University of Manchester

This content has been supported by Crown Agents (whose brand it displays). All content is editorially independent. Contact Rachel Joy (rachel.joy@theguardian.com). For information on debates visit: theguardian.com/sponsored-content